The present invention relates to a production system for retail goods such as beauty products and more particularly to a production system which receives sales information from retail outlets in a timely and accurate manner and is flexible in manufacturing the goods.
The invention relates, in another aspect, to a raw material necessary for the production of products can be placed with flexibility and economically, and thus insures timely procurement of raw materials without the disadvantage of carrying excessive raw material inventories. This raw material ordering system may be employed in conjunction with or independently from the production system.
In manufacturing a product for marketing, which is sold over retail counters, the manufacturer generally determines the quantity to be manufactured according to an initial marketing plan and instructs its factory to produce that quantity, and as need arises, they instruct the factory to carry out additional production.
However, such a production system is dangerous to the so-called fashion manufacturer which must launch a new product as often as, say, once a year and is specializing in fashion articles with limited market lives. Assuming that such a manufacturer drafted a merchandizing plan, manufactured an article accordingly and introduced it to the market and the articles was accepted by consumers better than expected and sold out soon. Soon, then deficiencies occur at retail outlets and the manufacturer loses many sales opportunities. Assuming, conversely, that the manufacturer mapped out a grandiose campaign but the market was not ready to accept their product. Soon, then too many articles remain unsold and the manufacturer must carry large stocks to be somehow liquidated.
To solve these problems, many manufacturers have explored better methods for predicting potential demands. Thus, they try to overcome the problems by predicting demands from the past sales performance of similar products and determining apparently appropriate production scales. However, when the article to be manufactured is an entirely new product, it is extremely difficult for the manufacturer to predict consumer acceptance, ascertain the trend in potential competitors, or predict the effect of a marketing campaign. Moreover, since weather may be a major factor affecting the sale of products, demand prediction has its own limits and every one in the industry today is aware of the great risk of relying on such prediction.
Raw Material Ordering System I
While different industries have been using somewhat different systems for the procurement of raw materials, the average approach is that which is known as the fixed point-fixed quantity ordering system.
According to this fixed point-fixed quantity ordering system, a safe stock level is predetermined for each raw material and when the raw material inventory on hand has decreased to this critical stock level, a signal is given for placing a new order. This system is predicated on the principle that the manufacturer should carry a reasonable stockpile of any raw material that is required to be certainly on the safe side. This is an expedient and optimal system for industries where stable production is the rule rather than the exception.
However, the fixed point-fixed quantity ordering system does not work well and entails too large economic losses in industries where many kinds of products are manufactured in small lots and particularly where the dependency of any raw material on the production scale of the product is large. Thus, if a plurality of product items share a plurality of raw materials in common and such product items can be manufactured merely by altering the combination of such raw materials, the fixed point-fixed quantity ordering system can be employed with advantage. However, if, for example, three product items A, B and C have one raw material a in common, the safe stock level of a, viz. the critical point for this raw material, will then be set at the maximum quantity required for the production of all the three product items, with the result that the safety stock level of that raw material is exaggerated of necessity and, hence, chances are that the manufacturer will have to carry an excessive raw material inventory.
To overcome the above disadvantage, a raw material ordering system called MRP (the acronym of Material Requirements Plan) has for some time been in use. This is a system such that an order for any raw material is placed in the quantity just necessary for the production of a given lot size of each product item and is intended to preclude the disadvantage of carrying an excessive raw material inventory.
As all the raw materials for each product item are assorted as a package, this system is convenient, indeed, but has the problem of rigidity. Thus, since the raw material a is earmarked for the production of item A only and no diversion of raw material a is made for the production of item B even if an instruction to produce B is entered, then the production of B must begin only after procurement of raw material a for B. Since the raw materials, a, b, c . . . have been packaged in necessary amounts for the production of item A, the diversion of raw material a from this package will result in a virtual waste of the other raw materials b , c . . . .
Raw Material Ordering System II
Furthermore, the raw material ordering system MRP involves particular difficulties and is disadvantageous when the raw materials call for long lead times between placement of an order and actual receipt of the raw materials. An example of such raw materials is bottles of cosmetics. Each manufacturer of cosmetics employs its own bottles with its own shape, configuration, color, and ornamental design. When a manufacturer of cosmetics places an order for bottles of a particular type, a manufacturer of the bottles then molds the bottles, does surface-finishing, and print brands and other characters and designs if any on the surface thereof. Thus, for placing an order for a raw material with a lead time of 3 months, it is of course necessary that the production scale as of 3 months ahead must have been determined but it is very difficult and even dangerous for manufacturers in the fashion and equivalent industries to predetermine a production size as of many months ahead.
Therefore, there has been proposed a still another system, viz. a preliminary ordering system in which the necessary quantities of parts, that is to say the amounts of consumption of parts are predicted independently of the production of a finished product and these quantities of parts are arranged to be available beforehand. According to this system, the necessary production activity can be started as soon as a manufacturing instruction is received but the manufacturer must maintain constant inventories of parts at all times and, particularly where the variety of production items is large, must maintain a proportionally increased total inventory of raw materials.
Furthermore, raw materials and particularly containers and the like are fed to the production line only after passing through a plurality of processes such as surface and other treatments (factory) and assembling (factory), with the result that various forms of inventories are carried in the respective processes. In such a situation, it is very difficult to keep a constant tab on which process stage is carrying what size of inventory and this was near to impossibility particularly where the container, for one, is procured from a series of container manufacturers and finishers. For this reason, the manufacturer in such cases places orders for raw materials for each production job without a clear picture of the inventory, with the result that they will have to carry a fairly large total inventory of raw materials.